Tesla (TSLA) shares ripped higher on Friday, extending a multi-day rally fuelled by renewed investor excitement around billionaire CEO Elon Musk’s artificial intelligence ambitions.
The chief executive’s recent remarks about TSLA’s future value being driven by humanoid robots have reignited speculative interest, with traders betting on long-term upside.
Despite concerns of slowing electric vehicle sales and an elevated valuation, Tesla stock is currently up some 80% versus its year-to-date low in early April.
www.barchart.com
The recent surge in TSLA stock reflect investors’ belief that a focus on humanoid robots could reshape the company’s narrative.
Earlier this month, Musk said “80% of Tesla’s value will be Optimus” – referring to the Nasdaq-listed firm’s humanoid robot initiative.
With EV growth stagnating and competition intensifying, the billionaire is betting big on artificial intelligence and automation to drive future value.
Tesla aims to scale Optimus production to 1 million units annually within five years, with prototypes already in development. While skeptics question the timeline and commercial viability, Musk’s track record of bold execution has investors intrigued.
If Optimus delivers even a fraction of its promise, TSLA stock could indeed catapult much higher.
Options data from Barchart suggests Tesla shares could move as much as 20% up or down by the end of the year.
Contracts expiring Dec. 19 imply a broad trading range between $316.88 and $472, reflecting meaningful room to the upside. Moreover, the expected move through Sept. 26 is 7.13%, according to options pricing, with a projected range of $366.33 to $422.55.
Given the recent rally and investor enthusiasm around Musk’s artificial intelligence roadmap, the upper bound appears more likely.
The options data suggests traders are pricing in continued momentum in TSLA shares. However, with the EV stock already trading at stretched valuation, the bullish sentiment may be driven more by narrative than near-term catalysts.
That said, the market evidently is leaning into Musk’s vision, at least for now.
Wall Street’s recommendation on Tesla stock, however, is in stark contrast with what the options data suggests.
The consensus rating on TSLA shares currently sits at “Hold” only with a mean target of roughly $300 indicating potential downside of 23% from here.
www.barchart.com
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Elon Musk, already the world’s richest person, could become the first trillionaire after the Tesla board unveiled a massive new pay package for its CEO to keep his focus on the troubled EV maker.The package would grant him additional shares of Tesla stock if the company is able to grow far beyond its current value, with a market capitalization far greater than any company has ever approached. Musk’s previous pay package, which added significantly to his massive wealth, also laid out ambitious growth plans that once appeared to be a reach – but which Tesla proved able to reach easily.The new pay package could grant Musk 423.7 million additional shares of Tesla stock. Those shares would be worth $143.5 billion at today’s stock value.But Musk would get those shares only if the value of Tesla stock increases significantly in coming years. The company stock would need to reach an overall value of $8.5 trillion for Musk to get all the shares, significantly above the current market capitalization of $1.1 trillion and roughly double the current market value of Nvidia (NVDA), the current most-valuable company on the market.The company’s proxy statement that laid out Musk’s payment plan also included a shareholder proposal that Tesla take a stake in privately-held xAI, the artificial intelligence company that Musk also owns. That could help Elon Musk further consolidate his growing business empire.XAI recently purchased X, the social media platform formerly known as Twitter, which Musk bought for $44 billion of his own money in 2022. The company did not take a position for or against that shareholder proposal, which does not give any details of how large a stake Tesla should take in xAI, and at what price.Musk currently owns 410 million shares of Tesla shares, worth $139 billion at Thursday’s closing price. That stake, along with his stakes in xAI, rocket company SpaceX, and several other companies he has started and runs, have made him the richest person on the planet, worth $378 billion according to Bloomberg’s billionaire tracker.He currently has options to buy an additional 304 million shares of Tesla, but a judge in Delaware has twice struck down that 2018 pay package that granted him those options as illegal. Those rulings came despite overwhelming approval by Tesla shareholders – twice. The company again has tried to grant those options to Musk this year, and adding in those options, he now owns 18% of the company’s shares.Tesla shares nearly doubled in value to a record-high price for its shares between election day and mid-December 2024, as investors bet that his close ties to President Donald Trump would be a boon for Tesla. But as Tesla faced protests and dropping sales and falling profits in backlash to those ties (before he had a falling out with Trump), all those things resulted in Tesla’s stock losing those gains. The shares have recovered some of those losses, but they are still down 26% from the December peak.Still, Musk and his fans on Wall Street have insisted the company is well positioned to grow even larger and more successful in the future. He has continued to predict that his plans for self-driving cars – including a robotaxi service – will create massive profits and value for shareholders. The robotaxis would provide rides to passengers and also allow Tesla owners to rent out their cars for driverless rides when not in use.Musk has also promised a line of humanoid robots that could bring in even more sales than Tesla’s car business.“It’s a big pay package but Tesla needs to keep its biggest asset in Musk as CEO,” Wedbush Securities analyst Dan Ives told CNN Friday. Ives is one of the bigger Tesla bulls on Wall Street.“In this AI era Musk now will drive its next leg of growth,” Ives added. “The Board had a $1 trillion dollar decision and made the right one.”The board’s proxy statement spoke of the importance of keeping Musk focused on Tesla going forward. In addition to his many business interests, he remains active in politics, despite his falling out with President Trump. He has announced plans to form a third political party.Tesla, in its proxy statement, warned that it needed to incentivize Musk to focus his attention on growing the company. It said that during the negotiations on the pay package, “Musk also raised the possibility that he may pursue other interests that may afford him greater influence if he did not receive such assurances.”The board said it “believes that Mr. Musk singularly possesses the leadership characteristics necessary to transform Tesla and realize its long-term mission at an unparalleled level.”But, so far, those big ambitions have all been grand claims from a man and company that have often fallen short of their promises. Tesla is facing growing competition from Chinese EV makers. BYD, one of those Chinese automakers, is poised to pass Tesla for the most EV sales worldwide, even though it is not available for sale in the United States.Tesla also faces competition from other companies that are ahead of it in providing robotaxi services, including Waymo, the autonomous vehicle unit of Google parent Alphabet, which has its own service and has partnered with Uber in some cities.Shares of Tesla (TSLA) were slightly higher in premarket trading on the news.
Elon Musk, already the world’s richest person, could become the first trillionaire after the Tesla board unveiled a massive new pay package for its CEO to keep his focus on the troubled EV maker.
The package would grant him additional shares of Tesla stock if the company is able to grow far beyond its current value, with a market capitalization far greater than any company has ever approached. Musk’s previous pay package, which added significantly to his massive wealth, also laid out ambitious growth plans that once appeared to be a reach – but which Tesla proved able to reach easily.
The new pay package could grant Musk 423.7 million additional shares of Tesla stock. Those shares would be worth $143.5 billion at today’s stock value.
But Musk would get those shares only if the value of Tesla stock increases significantly in coming years. The company stock would need to reach an overall value of $8.5 trillion for Musk to get all the shares, significantly above the current market capitalization of $1.1 trillion and roughly double the current market value of Nvidia (NVDA), the current most-valuable company on the market.
The company’s proxy statement that laid out Musk’s payment plan also included a shareholder proposal that Tesla take a stake in privately-held xAI, the artificial intelligence company that Musk also owns. That could help Elon Musk further consolidate his growing business empire.
XAI recently purchased X, the social media platform formerly known as Twitter, which Musk bought for $44 billion of his own money in 2022. The company did not take a position for or against that shareholder proposal, which does not give any details of how large a stake Tesla should take in xAI, and at what price.
Musk currently owns 410 million shares of Tesla shares, worth $139 billion at Thursday’s closing price. That stake, along with his stakes in xAI, rocket company SpaceX, and several other companies he has started and runs, have made him the richest person on the planet, worth $378 billion according to Bloomberg’s billionaire tracker.
He currently has options to buy an additional 304 million shares of Tesla, but a judge in Delaware has twice struck down that 2018 pay package that granted him those options as illegal. Those rulings came despite overwhelming approval by Tesla shareholders – twice. The company again has tried to grant those options to Musk this year, and adding in those options, he now owns 18% of the company’s shares.
Tesla shares nearly doubled in value to a record-high price for its shares between election day and mid-December 2024, as investors bet that his close ties to President Donald Trump would be a boon for Tesla. But as Tesla faced protests and dropping sales and falling profits in backlash to those ties (before he had a falling out with Trump), all those things resulted in Tesla’s stock losing those gains. The shares have recovered some of those losses, but they are still down 26% from the December peak.
Still, Musk and his fans on Wall Street have insisted the company is well positioned to grow even larger and more successful in the future. He has continued to predict that his plans for self-driving cars – including a robotaxi service – will create massive profits and value for shareholders. The robotaxis would provide rides to passengers and also allow Tesla owners to rent out their cars for driverless rides when not in use.
Musk has also promised a line of humanoid robots that could bring in even more sales than Tesla’s car business.
“It’s a big pay package but Tesla needs to keep its biggest asset in Musk as CEO,” Wedbush Securities analyst Dan Ives told CNN Friday. Ives is one of the bigger Tesla bulls on Wall Street.
“In this AI era Musk now will drive its next leg of growth,” Ives added. “The Board had a $1 trillion dollar decision and made the right one.”
The board’s proxy statement spoke of the importance of keeping Musk focused on Tesla going forward. In addition to his many business interests, he remains active in politics, despite his falling out with President Trump. He has announced plans to form a third political party.
Tesla, in its proxy statement, warned that it needed to incentivize Musk to focus his attention on growing the company. It said that during the negotiations on the pay package, “Musk also raised the possibility that he may pursue other interests that may afford him greater influence if he did not receive such assurances.”
The board said it “believes that Mr. Musk singularly possesses the leadership characteristics necessary to transform Tesla and realize its long-term mission at an unparalleled level.”
But, so far, those big ambitions have all been grand claims from a man and company that have often fallen short of their promises. Tesla is facing growing competition from Chinese EV makers. BYD, one of those Chinese automakers, is poised to pass Tesla for the most EV sales worldwide, even though it is not available for sale in the United States.
Tesla also faces competition from other companies that are ahead of it in providing robotaxi services, including Waymo, the autonomous vehicle unit of Google parent Alphabet, which has its own service and has partnered with Uber in some cities.
Shares of Tesla (TSLA) were slightly higher in premarket trading on the news.
Shares of World No. 2 electric vehicle (EV) stock Tesla(NASDAQ: TSLA) jumped 5.2% through 10 a.m. ET Tuesday, despite Bernstein cutting the stock’s price target to $120 per share. Bernstein cited soft demand for Tesla’s EVs as its reason for lowering the price target, reducing predicted Tesla car sales, and maintaining its sell rating.
So why is Tesla up despite this news?
Buon giorno, Tesla!
Because Italy.
As Il Sole 24 reports, the electric car maker is negotiating with the Italian government to secure an Italian production site — not for producing electric cars. Tesla wants Italy as home base in Europe for building electric trucks and vans. From Italy’s perspective, this would bring a second automotive manufacturer to the country, joining Stellantis, which currently dominates. (Three Chinese companies are also negotiating.)
But why would Tesla — which already has a car plan in Germany — want to build a new plant? Details aren’t 100% clear, but if Tesla plans to introduce its electric Semi (the Tesla vehicle pictured in Il Sole‘s story) to Europe, well, those might be more expensive to ship overseas from the U.S. for sale in Europe. Setting up a local shop might make sense.
Also curious is the newspaper’s mention of a Tesla “van.” While Tesla has hinted at this possibility, it hasn’t announced a product yet. This could be a first for Tesla, and expand the company’s market of customers.
Is Tesla stock a buy?
It’s too early to say this Italian news is a new reason to buy Tesla stock. What it does do is inject uncertainty into Wall Street analyst predictions such as Bernstein’s — that Tesla stock is doomed to lose one-third of its value this year. It reminds us that CEO Elon Musk can still surprise both investors and competitors.
With Tesla stock trading at prices last seen in May 2023, and a P/E ratio looking almost “normal” (for any other company) at just 40x earnings, it might be time to take another look at Tesla.
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Rich Smith has positions in Stellantis. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.
History is proof the U.S. stock market always climbs to new highs given enough time. But the stocks that lead the charge higher aren’t always the same. To help find the new leaders, Wall Street often groups them together to separate them from the rest of the market. For example, CNBC financial analyst Jim Cramer coined the FAANG acronym in 2017 to describe five of the largest technology companies at the time:
Facebook, which now trades as Meta Platforms
Apple
Amazon
Netflix
Google, which now trades as Alphabet
That leadership shifted in 2023 when a group of seven stocks drove the S&P 500 index to an annual return of twice its historical average. Bank of America analyst Michael Hartnett dubbed those stocks the “Magnificent Seven,” and they include:
Meta Platforms
Apple
Amazon
Alphabet
Microsoft
Nvidia (NASDAQ: NVDA)
Tesla
Image source: Getty Images.
It’s time for the “AI Five,” according to one analyst
With Tesla stock sinking 22% so far this year, Jim Cramer thinks it should be booted from the Magnificent Seven entirely. The company is facing sluggish electric vehicle sales in 2024, which could keep a lid on its stock price and weaken the power of the Magnificent Seven as a group.
It prompted one analyst — Glen Kacher from Light Street Capital — to rethink the stock market’s leadership altogether. He thinks investors should be focused on artificial intelligence (AI), so he has identified a new group of stocks and called it the “AI Five.” It includes:
Nvidia
Microsoft
Taiwan Semiconductor Manufacturing
Advanced Micro Devices(NASDAQ: AMD)
Broadcom (NASDAQ: AVGO)
Each company has a hand in developing the hardware and software necessary to bring AI to life. Here are two AI Five stocks investors should consider buying right now.
1. Advanced Micro Devices (AMD)
Advanced Micro Devices might be one of the best semiconductor stocks to own in 2024. Its new MI300 data center chips are designed to process AI workloads, and they are shaping up to be the main rivals to Nvidia’s industry-leading H100.
The MI300 comes in two configurations. The MI300X is a pure graphics processor (GPU) like the H100, whereas the MI300A combines GPU and central processing unit (CPU) hardware to create the world’s first accelerated processing unit (APU) for data centers. The MI300A will power the El Capitan supercomputer at the Lawrence Livermore National Laboratory, and it’s expected to be the most powerful in the world when it comes online later this year.
Some of the world’s largest data center operators, companies like Meta Platforms, Microsoft, and Oracle, are also racing to get their hands on MI300 chips. They have relied almost entirely on Nvidia up until now, but supply constraints are pushing them to look for viable alternatives, and AMD is ready.
In the fourth quarter of 2023, AMD issued a bullish forecast for the MI300. The company originally expected the GPU to pull in $2 billion worth of sales in 2024, but it raised that number to $3.5 billion, much to the delight of investors.
AI is also coming to personal computers, where users can process AI on-device for a faster experience, which reduces the reliance on external data centers. AMD’s Ryzen AI series of neural processing units (NPUs) already power more than 50 notebook designs, and the company is working with Microsoft to develop a new version of Windows that will run AI workloads more efficiently.
Millions of personal computers have already shipped with Ryzen AI chips, giving AMD a 90% market share in the segment. Ryzen AI drove the company’s Client segment revenue to $1.5 billion in the fourth quarter, representing a whopping 62% year-over-year increase. AMD expects that momentum to continue, especially because it’s preparing to launch a next-generation chip that could be more than three times faster.
Simply put, 2024 is set to be incredibly exciting for AMD, and the company could be on the cusp of a multiyear growth cycle on the back of its new hardware slate.
2. Broadcom
As far as being an AI stock, Broadcom lives in the shadow of glamorous names like AMD and Nvidia. However, Broadcom is developing AI on multiple fronts, and its stock has delivered a 343% return over the last five years, so it definitely warrants some attention. Despite being founded in 1991, the company really took a leap forward when it merged with semiconductor giant Avago Technologies in 2016.
Broadcom is now a conglomerate that not only includes Avago but also several acquired companies like semiconductor device supplier CA Technologies, cybersecurity giant Symantec, and cloud software developer VMware. Broadcom spent a whopping $98.6 billion on those three acquisitions since 2018.
VMware, which had a price tag of $69 billion alone, is an increasingly important company in the context of the AI boom. Its software allows users to run virtual machines to distribute cloud infrastructure more efficiently. For example, one user on one server might only utilize 10% of its capacity, but virtual machines allow multiple users to plug into that server so it operates at capacity. Considering so many companies are racing to access AI data center infrastructure, optimization is one way they can squeeze the most value out of what they have.
Broadcom itself is also considered a leader in networking and server connectivity solutions for the data center. It developed a high-bandwidth switch called Tomahawk 5, which is designed to accelerate AI and machine learning workloads. A switch regulates how fast data travels from one point to another, and considering developers are feeding billions of data points to powerful GPUs to train AI models, it has become an important piece of the infrastructure puzzle.
Broadcom generated a record-high $35.8 billion in revenue during fiscal 2023 (ended Oct. 29), which was an increase of 8% compared to fiscal 2022. However, Broadcom’s revenue is expected to grow by 40% in fiscal 2024 to $50 billion, thanks to the inclusion of VMware’s financial results for the first time.
Based on Broadcom’s $42.25 in non-GAAP (adjusted) earnings per share in fiscal 2023 and its current stock price of $1,226.55, it trades at a price-to-earnings (P/E) ratio of 29.1. That’s a 9% discount to the 32.1 P/E of the Nasdaq-100 index, which implies Broadcom is still cheap relative to its peers in the tech sector.
Given the company’s growing presence in AI through acquisitions and in-house development, Broadcom looks like a great AI Five stock to buy now and hold — especially at this price.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Bank of America, Meta Platforms, Microsoft, Netflix, Nvidia, Oracle, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Tesla (NASDAQ: TSLA) has been one of the best-performing stocks on the market over the last decade as it proved that electric vehicles (EVs) can be a viable business, and even a highly profitable one. However, recently, Tesla stock has been looking surprisingly mortal. The stock trades down by roughly half from its peak in 2021, and its fourth-quarter earnings report shows why the stock has faded.
Tesla’s revenue growth continues to slow and profits are falling, and that pattern continued in Q4. Automotive revenue rose 1% year over year to $21.6 billion, and overall revenue was up just 3% to $25.2 billion. These metrics reflect the impact of lower prices as the company looks to stay competitive, gain market share, and overcome headwinds from higher interest rates.
As a result of lower prices, operating income fell 47% year over year to $2.06 billion, and adjusted earnings per share fell 40% to $0.71. Tesla missed estimates on the top and bottom lines, and it also forecast slower production growth in 2024.
Seemingly, Tesla is less of a millionaire-maker stock than it was two years ago. What’s an ambitious investor to do with this news? If you’re looking for growth stocks that can help make you a millionaire, keep reading.
Image source: Tesla.
Nvidia has powerful tailwinds pushing it higher
Tesla and every other artificial intelligence (AI) stock can’t make their technology without the help of one company, and that’s Nvidia (NASDAQ: NVDA).
Nvidia stock soared over the last year as its chips are in extraordinarily high demand from companies like OpenAI, Oracle, Meta Platforms, and Tesla, among others. Nvidia, which invented the graphics processing unit (GPU), has a significant head start over its rivals. AI systems like OpenAi’s ChatGPT and autonomous vehicle systems like Tesla’s full self-driving rely on massive training models that use the kind of chips and accelerators Nvidia makes.
That strong demand should help power Nvidia stock higher this year as it’s coming off a third quarter in which revenue tripled year over year and its generally accepted accounting principles (GAAP) profit rose by 12x.
As profits have soared, the company’s valuation has come down, and it appears to be set for another strong year in 2024 as cloud infrastructure companies and others are still rapidly building out their AI infrastructure. This should favor Nvidia.
General Motors is more profitable than Tesla
Tesla made its name in electric vehicles, but there are signs of slowing demand for EVs that could spell trouble for Tesla and its peers. It also creates an opening for traditional automakers like General Motors (NYSE: GM) whose stocks got hammered as investors chased EV stocks and abandoned legacy automakers.
As a result, GM stock now trades at a price-to-earnings ratio of just 5. GM may not offer the same growth potential that Tesla does, but the company has a growing EV and autonomous vehicle (AV) business in Cruise, whose rollout has taken a pause after San Francisco regulators suspended operations.
GM remains more profitable than Tesla and is reporting solid growth with a 14% increase in vehicles sold to 2.6 million. That’s a strong growth clip for a mature business and from a stock priced for no growth. Notably, that’s also significantly faster than Tesla’s Q4 revenue growth.
GM’s low valuation also gives the company a greater opportunity to return cash to shareholders. In fact, the company announced a $10 billion accelerated share repurchase program in November and raised its dividend by 33% to $0.12 a share.
Considering the growth in its legacy car business and its investments in electric vehicles and autonomy, GM should be able to bridge the gap with EVs and AVs when the time comes. If GM delivers another strong earnings report, the stock could soar.
Should you invest $1,000 in Nvidia right now?
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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, Oracle, and Tesla. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
Tesla (NASDAQ: TSLA) is currently navigating through a period marked by significant financial scrutiny and strategic challenges as it fights to maintain its dominance as a leader in the electric vehicle industry. With Tesla’s latest financial reports drawing market attention, the company is struggling with more negative headlines. Tesla’s news headlines report a crucial period for the company, as it faces global supply chain challenges and shifts in operational strategies. Investors and analysts closely monitor the company’s stock performance while evaluating Tesla’s financial results and strategic choices.
In Tesla’s latest earnings report for Q4 2023, Tesla presented several crucial financial and operational metrics, reflecting its current market position and growth trajectory. By examining Tesla’s financial outcomes, stakeholders and potential investors can better assess the company’s strengths, challenges, and potential for future growth.
Revenue and net income insights
Tesla reported substantial revenue in Q4 2023, amounting to $25.1 billion. This figure, while exceptional, fell slightly short of Tesla analysts’ expectations. Analysts had projected revenues of around $25.7 billion. Tesla’s net income was significantly influenced by a one-time, non-cash tax benefit of $5.9 billion. This substantial increase stemmed from releasing a valuation allowance on certain deferred tax assets. In essence, this accounting adjustment indicates Tesla’s anticipation of utilizing its deferred tax assets in the future, mirroring its sustained profitability. The substantial nature of this tax advantage suggests that Tesla foresees the continuation of profitable operations, thus providing the opportunity to leverage these tax assets effectively.
Earnings per share analysis
The earnings per share (EPS) for Q4 2023 is a critical measure of Tesla’s profitability. EPS was reported at $0.71 on a non-GAAP basis. This was slightly below the anticipated $0.73. However, on a GAAP basis, EPS stood at an impressive $2.27, primarily elevated by the significant non-cash tax benefit related to deferred tax assets.
Automotive revenue breakdown
Automotive revenues for Q4 were reported at $21.5 billion, just shy of the forecasted $21.7 billion. The full year 2023 saw automotive revenues climb to $82.4 billion, a substantial portion of the total $96.8 billion revenue, underscoring Tesla’s core business strength in the electric vehicle market.
Vehicle production and sales figures
Tesla’s vehicle production and delivery numbers are vital indicators of its operational capacity and market demand. In Q4 2023, the company produced 494,989 vehicles and delivered 484,507 vehicles. These figures are symbolic of Tesla’s manufacturing capabilities and consumer appeal. The figures also reflect the challenges and triumphs of scaling production in a competitive environment.
Year-over-year growth and model-specific performance
Tesla achieved notable growth in the automotive sector during the past year, as revealed in the analysis of its financial results by Tesla’s Investor Relations department. The company saw a 38% year-over-year increase in vehicle deliveries and a 35% rise in production, further cementing its position in the electric vehicle market. The success of Tesla’s fourth quarter and full-year 2023 performance can primarily be attributed to the high popularity of specific models.
In Q4 2023, Tesla delivered 460,189 Model 3/Y vehicles, representing a significant portion of its sales. Additionally, 18,652 Model S/X vehicles found their way to customers during the same period. It is estimated that approximately 1,250 other vehicles, including the much-anticipated Cybertruck and the innovative Semi, were also delivered in this timeframe.
When examining Tesla’s performance for the entire year, the company delivered 64,557 Model S/X vehicles, while the Model 3/Y continued to dominate with 1,738,358 units sold. An additional 1,251 vehicles from other models rounded out the full-year sales figures.
Operational margin and cash reserves
Tesla’s operating margin for Q4 was 8.2%, impacted by factors such as reduced vehicle average selling price (ASP) and costs associated with the Cybertruck production ramp-up. The end of Q4 saw Tesla’s cash reserves, including cash equivalents and investments, rise to $29.1 billion, indicative of strong financial health and investment potential.
Under the hood: Analysts tinker with Tesla’s numbers
Tesla’s Q4 2023 earnings report has prompted varied responses from analysts, mainly due to differences between expected and actual financial results. The company reported a total revenue of $25.17 billion, a slight increase over the previous year but below the consensus estimate. This shortfall in revenue raised questions about Tesla’s market dynamics and pricing strategies.
A key focus point was Tesla’s automotive revenue, which did not meet the projected figures. This discrepancy has led analysts to speculate about potential challenges in Tesla’s demand and pricing mechanisms. Additionally, a decline in automotive regulatory credits revenue contributed to the revenue gap, highlighting dependencies on external market factors.
Operational aspects, such as total vehicle deliveries falling short of expectations, also drew attention. This suggested potential limitations in Tesla’s production capabilities or market reach. Analysts further evaluated Tesla’s performance across different business segments, noting slower energy generation and storage growth, while services and other segments showed significant improvement.
Overall, the analysis by market experts suggests caution regarding Tesla’s ability to sustain its growth trajectory in the face of increasing competition and operational challenges. The concerns center around Tesla’s market position, production efficiency, and ability to navigate complex global supply chain dynamics.
Tesla’s current adversities emphasize its adaptability and the importance of strategic realignment. Financially, the company maintains its strength despite occasional setbacks. Operationally, its response to supply chain disruptions and customer service issues will be crucial to maintaining its market position. Tesla’s alignment with market and investor expectations is vital for future success, as the high expectations placed on the company by analysts reflect the need to adapt and innovate.
Fool.com contributor Parkev Tatevosian compares Tesla(NASDAQ: TSLA) with Nvidia(NASDAQ: NVDA) to determine which is the better artificial intelligence (AI) stock to buy today to prepare your investment portfolio for 2024.
*Stock prices used were the afternoon prices of Dec. 21, 2023. The video was published on Dec. 23, 2023.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Hand holding a charger plugged into an electric vehicle
Any time a company improves its business in a major (and highly competitive) market is cause for celebration. That was the case on Thursday with electric vehicle (EV) pace-setter Tesla(NASDAQ: TSLA), which revealed that it’s getting its product to market more quickly in a key foreign country.
As a result, investors traded the company’s stock up by almost 5%, a figure much higher than the S&P 500 index’s 0.3% bump on the day.
Tesla wait times in China are coming down
As reported by stock market website StreetInsider.com, Tesla’s Chinese website updated its expected delivery time frames for its popular Model 3 sedan and Model Y crossover. Previous to those updates, Tesla last updated its projected times in November.
For the former model’s Long Range version, the EV company expects to deliver it from two to six weeks. That’s well down from the previous anticipated period of six to nine weeks. As for the Model Y Long Range, eager customers now only need to cool their heels for the same two to six weeks. Previously, they would have had to hold steady for six to eight weeks.
China, given its size and still-growing economy, is a key market for nearly every type of company. That goes double for EV makers like Tesla, as the government continues to push for greener vehicle solutions given historically high levels of air pollution.
The country is not an easy market
That’s why Tesla built and operates one of its “gigafactories” in the country, namely in the Shanghai area. While China is a country with vast potential, it’s also challenging for a relatively high-end foreign manufacturer. The government clearly favors domestic vehicle makers like Nio(NYSE: NIO), plus Tesla’s pricing can put its wares out of reach of many Chinese consumers. Any honing of the company’s competitive edge there is welcome.
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Tesla had a turbulent 2022 between falling stock prices and lagging sales amid rising competition. However, the electric vehicle manufacturer reported a record number of deliveries in the first quarter of 2023.
In Q1 2023, Tesla produced over 440,000 vehicles and delivered over 422,000, marking a nearly 36% increase in deliveries from the same period the previous year.
The uptick in sales may be in part due to Tesla’s price-cutting initiative that took place in January — the company slashed prices on the Model 3 and Model Y vehicles by nearly 6% and 20%, respectively. Just a week after Tesla announced the price cuts, interest surged for the company’s Model Y vehicle.
“These price cuts, as well as inventory on the ground, will win Tesla market share and help consumers overlook the brand’s aging lineup,” said Edmunds analyst Jessica Caldwell, per Insider, at the time. “Lower prices and immediate availability undeniably resonate with the American consumer.”
And that buyer interest has proved to be more than just a Google search, as Model 3 and Model Y cars accounted for about 97% of the Q1 deliveries.
The official financial results for Tesla’s first 2023 quarter will be posted after the market closes on April 19.
Speaking at the Forbes 30/50 Summit in Abu Dhabi on Monday, famed stock picker Cathie Wood of Ark Invest sharply criticized passive investing and touted disruptive innovation stocks, even as her flagship fund continues to post lackluster returns as shares of top holdings like Tesla and Zoom continue to struggle.
“Fear has pushed investors back to their benchmarks,” Wood warned.
Patrick T. Fallon/AFP via Getty Images
Key Facts
The founder and CEO of Ark Invest on Monday criticized the wider shift toward passive investing as “backwards looking,” arguing that “fear” has pushed investors back to “mimicking indexes, which is kind of mindless.”
“I believe this is the most massive misallocation of capital in the history of mankind,” Wood told Forbes, arguing that her firm’s thesis of investing in disruptive technology is now more important than ever, given today’s uncertainty in markets.
The famed stock picker emphasized that she still sees “explosive growth opportunities” ahead, but increasingly risk-averse investors have “defaulted to benchmarks” amid concerns over inflation, the Russia-Ukraine conflict and the Federal Reserve’s upcoming rate hikes.
Wood’s success soared in 2020 when her flagship Ark Innovation fund surged nearly 150%, but performance has since declined, with the fund falling 24% last year and another 37% so far in 2022.
The Ark Invest CEO remains undeterred by her skeptics: “Betting against innovation long term is a losing proposition,” she said, adding that the “visceral response [from critics] tells me we’re doing something right.”
While innovation was first “turbocharged” by the problems that arose during the coronavirus crisis in 2020, Wood now sees parallels to today’s market: “I feel we’re back there again, and now with the Russia-Ukraine issues, we have many more problems.”
Crucial Quote:
“Innovation solves problems. We now have a lot more problems,” Wood said.
What To Watch For:
With energy prices skyrocketing in recent weeks amid the conflict between major exporters Russia and Ukraine, that has created a “huge supply shock,” which is “really going to hurt consumer purchasing power,” Wood told Forbes. “I think the risks of recession have increased dramatically.”
Surprising Fact:
Though experts widely agree that rising oil prices could lead to higher inflation in the United States, a by-product of surging energy prices is that they will “only accelerate the push toward electric vehicles and autonomous transportation,” according to Wood. That’s good news for her biggest holding, electric vehicle maker Tesla—with the Ark Innovation fund holding a stake worth more than $1 billion. Wood’s flagship fund also has large positions in virtual healthcare company Teladoc (worth just over $750 million), video streaming platform Roku (worth over $700 million), videoconferencing service Zoom (worth around $650 million) and cryptocurrency exchange Coinbase (worth $600 million).
